News platforms are bursting with stories about the recession Australia is now in. There are the headline stories based on the numbers and the personal stories of people losing their businesses and homes.
It is easy to get drawn into the doom and gloom news cycle. Unfortunately, news outlets think bad news drives clicks, and, so, they run the stories.
In our local communities, I think it is helpful that we act against feeding the doom and gloom stories. It is helpful that we do nothing to negatively impact consumer confidence.
My suggestion is: focus on what has been working for you in 2020, present as business as usual, bring in new product, change displays, host in-store events, be active on social media, play happy music, run competitions, be a good local retailer.
It is these types of activities that distance your business from negative perceptions relating to the recession.
Yes, this is a tough time. Worrying about it being a tough time will not help you move through it.
You can’t control that there is a recession.
You can control what your business does. That has to be the focus.
I have been through two recessions in business. Each was different. This time around it is expected to be worse because of the global Covid situation. The reality is that for many newsagents, there are elements of Covid that help your businesses. In many newsagencies, revenue is up in 2020 so far. This is good news.
Be attuned to opportunity. Also, keep a low profile as no one likes a bragger during times of adversity.
Sure, the economy is in recession. I’m sure that in plenty of newsagency businesses there is plenty of good news.
Quite a few people are still doing well throughout this pandemic. Those that have a good job are actually saving money, not being able to travel, so have money to spend. Then you have those receiving jobkeeper and jobseeker, in a lot of cases more income than normal. I would be making sure I had high margin/high price point options available for those with funds to spend. Making sure you keep new and fresh stock circulating is also very important. On the cautious side I would watch my overall stock holding, maybe reducing some of the automatic order thresholds on some items. You don’t want to be carrying too much stock if/when things get tighter after jobseeker and jobkeeper end. The gold coins Mark mentioned in an earlier post, are a good case in point. These items are often recession proof, as collectors usually have the means to continue collecting through tough times.
Mark’s previous advice has been spot on about better margin products that are not common for newsagents, being frugal, keeping inventory etc. etc. I like the coins idea too.
I suspect most newsagents are not getting jobkeeper. We aren’t as we are up 20% yoy.
Amanda, I agree with your comments though not sure about “most” it varies The High Street suburban neighbourhood and the Country Town High St are least holding their own and at best going great guns.
Shopping Malls in the Ciies-a shocker especially if they don’t have range. Similar in Rural regional city areas with shopping centres (enclosed ones anyway)
Some positive observations to assist others in the channel to keep the headlines in perspective.
1. The downturn numbers being reported now relate to the June quarter not the current quarter. With Chinese demand for our resource exports bouncing back strongly we may even sneak out of recession as early as the current quarter.
2. Retail in general has bounced back quite strongly post lockdown. Many in our channel are reporting the same. Melburnians hang in there as there is light at the end of the tunnel.
3. Many listed retail companies are currently reporting stronger than anticipated results and are still are paying dividends despite government support ( see SMH article dated 5 September)
4. Pressure is on shopping centre landlords to renegotiate leases and to reduce their rents. This pressure will only intensify in coming months.
5. Many newsagencies which have been listed on the market for sale for some time are now selling as others exiting employment look for income producing opportunities.
I am a strong believer than one must always look to invest in their own business and not get too worried about the overall economic cycle.
Steve, Your last sentence, I am a strong believer than one must always look to invest in their own business and not get too worried about the overall economic cycle, is critical.
I, too, believe that we make our own success. This means leaning into, chasing even, change. Specifically, for newsagents it means diversifying customer source, average GP% and growing how we transact.
I wrote the post because of the approach of many to embrace the doom and gloom stories. I get they sell clicks. In retail,. they don’t help.
Graeme, I get to talk with many newsagents and see a broad set of data. I think the most mentioned by Amanda is right. Shopping centre businesses are challenged, for sure. However, on the high street and in regional and rural as has been noted here for months, they are strong, many are in double digit growth, which is great news.
I said that from my base it’s the same however I am not sure about majority as I haven’t got the data on every NSW Country and City newsagency. Colin oncve picked me up on the usage of majority means over 50%% of the total.
I supsect you haven’t seen the total amount of data from all Newsagents either.
I am also aware of newsagents that are down in the Rural areas of NSW very much so no I am not loking at gloom and doom however the local economy is NOT just based on COVID in fact far from it. Bush Fires, Drought, Flood, exports Coal, iron ore,wheat, wool ans grain to name a few products maintain the local economy and outback some are doing it tough. There is a poick up in hospitality as Grey Nomads are travelling as mentioned by me in other posts.
Most could be taken from a lot of ones that aren’t as being a tad “Glossy” you decide.
i wasn’t having a go at Amanda just being sensitive re those I know that aren’t getting jobkeeper that are just the same same which was just surviving and those that are doing less.
It’s tough even though the got the Cash Flow allowance of $10k plus they will receive another lot in Sept- Oct.
Mark as a point to make not personal hwve industry wise if one does the Rankings Report of Lotto,sales
NSW or other States one gets the actual up and downs of change.
This reflects traffic flow and is very interesting of which I could go into further detail even apart from this. i am not trying to compete with knowledges only share the real experience of it. I am far past trying to build business by participating here I am just sharing a passion for this industry with some facts as well as some observations
Sure I am still active in newsagency matters as well as Brokerage – more advisory work than ever- howver it’s the interest and sharing that is important for building a business well ..it’s now time to return the benefit not to build it.
Graeme I note your point re lotteries movements but would add that a major contributor here is Tabcorp’s strategy of driving online sales. Lotteries turnover is also largely impacted by the jackpotting of prizes and yes Covid assisted Tabcorp with their growth strategy.
In my own store our non lotteries revenue for the the current financial year is up 17 per cent. Non -Lotteries GP is up 24 per cent and our bottom line is looking very healthy. Foot traffic and consumer spending has been very strong. Our Lotteries takings on the other hand are down 10 per cent year on year.
We actually find that lotteries foot traffic hinders our other sales and bottom line and is not a good indicator of the health of our business.
I might add Graeme the abovementioned increases are inclusive of our subbie sales. In store sales are are up 21 per cent year on year. We are yet to launch an online store.
Steve we have agreed on this as well as agreeing on your “special location” 1.5 hrs form Sydney and the Tourist knock on affect wich will be sustainable especially as they can’t cruise or fly. It’s great news, however as I say there still are a lot that are not getting this situation. I see no evidence of the increase being the majority of all outlets when I look at the foot traffic of lotto as it is the only comparison available.
If the Town doesn’t increase in foot traffic then how can it possibly be seeing an enourmous increase in sales? My opinion is not aimed at gloom just Horses for Courses specific types of destinations are doing extraoridarily well.